Why the Strive CEO is doubling down on Bitcoin amid tariffs and AI

Transcript

GM good morning welcome to the milk Road show The Daily crypto show where we break down crypto news faster than politicians break trade agreements I'm your host Jay Hamilton and there's two major things happening in the markets right now on this Monday morning and over the past few weeks first we got tariffs causing massive uncertainty markets are dipping what happens next what does this all mean and then second we have ai deep seek shock the world just only a week ago so recent and people starting to think are are tech stocks overpriced are is Bitcoin overpriced as a result of that that is also causing markets to push down so we had to bring on an expert who could break this all down for us and help us

wrap our head around that so we got Matt Cole CEO of strive a leading asset and wealth management company we're going to talk with Matt about why he has so much conviction in Bitcoin in the face of AI Innovation and the impact that AI Innovation will have on markets and then therefore Bitcoin we're going to talk about why Matt believes that you should really use Bitcoin as the hurdle rate or The Benchmark for all your Investments and what that means when the rest of the world catches up to that thesis before we jump in guys please do me a favor subscribe like make a comment on the show wherever you are listening it helps us so much and it helps us get bigger and better guests on the show which helps you better with your Investments now let's jump in and hear from Matt

Matt welcome to the milk Road show dmj how you doing good man I love I love somebody who throws out a GM you don't hear GMS very much in the space anymore doing great let's let's start Matt with uh you you put out a tweet uh actually you know what let's start with tariffs I got to start there because that's sort of the big news right now um for everybody who is maybe on the sidelines not fully understanding uh what is going on with teros um I think there's this confusion of like ter happening or are they not happening right there's a lot of cross trade War sort of comments coming out of all different politicians

on all sides right now so just give us your view on tariffs currently so I think everyone freaked out over the weekend and said oh tariffs are coming right now and what they forgot is Trump's negotiating style and and so my belief is that Trump believes and I actually believe this too that for the last several decades as we've moved towards globalization that a lot of trade agreements that have been done with various countries have not been fully in America's interest they've been in the interest of the world but not in the interest necessarily as as America and so I think Trump's view is that tariffs would be better than keeping

things in their current status quo but actually reaching a new agreement that's more favorable to America would be the most desirable outcome so that's clearly the outcome that he wants I don't think he wants massive tariffs maybe some small amount of tariffs so I think that's that's the the driving force and my belief is he he's ultimately going to get a lot of the way in that direction and so you look at even over just the last weekend where 25% tariffs on Canada on Mexico and then as we're recording this and you know it's midday so who knows what what what it'll be like when when this podcast drops the world could change right but but day Mexico's already announced that they're going to delay tariffs for for 30 days Mexico and

America kind of a little bit of of a truce there they've also announced major changes putting a bunch of their uh security border guards around Mexico to try to stop the increase of of fent in all into the United States so you can clearly see that these tariffs are changing the Dynamics that that America is getting something more favorable out of this I think it'll likely happen in a similar matter with with Canada and and other nations as well so my base case is that tariffs might happen for a short period of time but that the globe does not go out into some some trade War that's my base case now I think that there obviously is a chance that things get worse with regards to a trade War uh

we have to be prepared for that but you know as we kind of go on in this podcast and talk about AI I think ultimately what you'll see is that AI is a much bigger story than than the tariffs but let's to say that they do happen a second if tariffs were to happen it's clearly going to be a negative for the economy but but and this is a big buck this is this is a crypto show it is a huge Tailwind for Bitcoin over the medium in the long run because if you think about the dollar as the reserve asset for for the for the world if you have a massive trade war and your Nations around the globe do you think that they're going to want to hold dollars as their Reserve asset no right and so this is this is something

that a lot of people in the crypto industry myself as well has had conviction that the dollars days as the reserve currency are not going to be infinite it's it's more of a matter of of when and and to what degree the dollar loses reserved currency status than than than if it happens and so there's versions that that the dollar can extend its status as the reserve currency for years or decades but but that's the direction that this is going that's that's and and crypto is likely going to be the answer for many nation states but a global trade War would make that happen on a much more expedited basis and so even if the trade War breaks out and there's a short-term down

down you know correction I think it's going to be one to buy for for crypto markets and Bitcoin specifically and you also said recently that you felt that there could be an unwind of the Bitcoin back to sort of pre-election prices uh just talk us through that scenario and the likelihood of that happening in your mind yeah so I like to think about the world and probabilities so you'll rarely see me on Twitter say I think that bitcoin's going to be 150 200k 500k whatever at the end of the year that's just not the way my mind works I think about all sorts of scenarios and I try to place a

probability on various scenarios and and obviously just think about the last 24 hours how much information's changed those scenarios change in real time but if you were to say right man what do I think the probability is of a correction an unwind of Bitcoin back to pre-election levels which is around 65 70k I would put it around 20 25% and I think that's a that's a high enough probability that you have to be prepared for it but it's also not a not a base case prediction right now my my base case prediction is that the the chop that we're seeing right now goes on for the next few months and ultimately we end the year at much much higher prices that's kind of my my base case and I

think that there's scenarios where you breakout sooner um I probably also C couch that at around 25% but but base case kind of some of this chop continuing for the next month is kind of my my base case but I think when you think about a a correction if that were to happen I think if you're if you can handle the volatility of crypto that's that's a huge blessing and one that if you're not already fully deployed you you deploy or you go out the wrist spectrum and and and look to uh take advantage of okay let's talk about AI so what what was your reaction what was your thought when you saw deep seek news that they had created this AI for $5 million in a way shorter time period

basically proving that hey AI Innovation is going to happen faster at a cheaper price than any of us thought how did you respond to and what is that sort of let's dive into how that helps you think about the this year and probably the biggest factor of this year will be AI Innovation yeah well since then there's been a lot of reports that I think are pretty credible that they probably didn't do this for $5 million but I actually I actually don't think that that matters five million a billion dollars whatever the fact of the matter is is that they created a major innovation in AI that was not planned right and that that doesn't need as much compute doesn't need as much as many powerful chips or as many powerful data

centers to produce a very similar quality of data as what many of the American companies that's an innovation it doesn't matter if it costs a trillion dollars or $5 million right and they open sourced it and and so that means that all these American models are already implementing that into their own models I think perplexity already has has already done this maybe there's more but what this shows is AI is going to happen faster and it's going to happen cheaper than people were predicted and and so markets are not prepared for that and I think that's that's something that's really hard exponential Innovation is really hard to get your mind around it because it's very hard to think in an exponential manner so I

think you have to just simplify it and the simplifying factor is that AI is going to be really good really fast and really cheap and I think that ultimately within with AI it's it's kind of hard to invest inv in it because you think about okay what what do I invest in do I do I buy let's say you even can buy do you buy and put an investment in open AI as an example or do you do you buy Nvidia or do you buy what do you what do you buy I don't think it's clear who the winners are going to be and who the losers are going to be in this I think there's an argument to be made that almost every company in America is a is is a loser actually in AI because AI actually gives power back to the

individual that if if these AI agents are so good and so cheap and they're in the power of every single one of our hands there's probably a lot of businesses that we don't need anymore and and and and so I think there's there's potential for pretty large scale disruptions in companies I like the idea of Billion Dollar Plus companies being created by like a single individual or gr with three people I think that's going to be a trend that that we're going to see so I think individuals should be spending a lot of their time in a I but investing in Bitcoin saving in Bitcoin I think Bitcoin is the only obvious answer in in AI as what to

invest in that I think has just so many Tailwinds behind it uh but as far as individual spend your time in AI invest in Bitcoin and then obviously for for I know your audien is to go out there isk Spectrum in crypto right but as far as like a long-term multi-decade investment I think saving in Bitcoin makes so much sense I want want to dive a little bit deeper into uh how you see AI Innovation and playing out over the next uh I don't know what time period you think about it in but um I tend to think about it as I don't know five years keeps on I think a lot of people are saying five years is a that the world will be different five years from now than it is today like

substantially different in a way that we've really never seen probably in in our lifetimes right um maybe if you're a gray hair and you around for the wars maybe you've seen some type of this type of transformation but even then possibly not right I think AI is Humanity's greatest Innovation is truly absolutely insane we have created artificial intelligence that is basically smarter than most humans or on the on the way of getting there uh what what is the disruption like play us play us out how do you see this what is going to happen in the next five years because I think we need to understand this better of how it impacts both humans but more so how it impacts like company and markets in order to understand why it's so

important to why why Bitcoin is really becoming this incredible investment tool yeah if you were to rewind two years ago and you said AI is happening what's going to get displaced most people would have probably said blue collar jobs the the truck driver is going to get displaced the plumber is going to get displaced but white collar jobs are safe and the more AI Innovations happened it's seemingly more likely that it's the opposite right and and it's the white color jobs that are going to get displaced and you know I've been using AI since since it came out and I would say even three four months ago when I used it I was like ah like it's okay you know I can do a few tasks and over the

last couple months the scale of improvement in these models have been so substantial that my base case is in five years that AI is better than almost every single white color world out there and so if that's your your base case then yes it's going to take time for disruption to fully take place for AI to you know actually be implemented and replace people like different companies are going to be at different levels of implementing a technological advancement but the the technology and the power of it itself will be there and so that's what that's what we have to prepare for is that once that's happened I don't think there's going to be a need

for very many white fellow jobs and I don't think that that means something that we have to be overly scared about I think there's there's a lot of productive ways that we could think about putting people to work in society that I think would take a long time for AI to actually replicate and and I've spent a good amount of time thinking about this and I'll just give you a couple examples of not necessarily predictions but just interesting things that could happen in a society where we don't need to spend our days hovering over a computer one could be that the idea of a single person working and supporting the family could come back actually that we've moved in society to needing two parent households to both

work to afford living maybe that's no longer the case that would be a huge Improvement it would be a a massive decrease in the amount of workers out there but if a parent whether it's man or woman stays behind and is able to raise a kid that there's that there's more kids and you remember Elon talks about this a lot that we actually have a a fertility crisis in this globe where fertility rates are are plummeting that actually rep represent an existential risk to humanity if people stop having babies right and so the ability for some someone to stay behind and raise a family is would be massive so that would be a huge positive for the globe uh secondarily if you think about how the

Globe has changed I like looking at some of the the architecture in in Europe from like the the 1400s the the Renaissance Era you go to Italy and you see these beautiful buildings and then you see modern buildings in America that are just basically made as cheap as you possibly can well maybe we go back to an Era where we actually have time to make beautiful buildings beautiful projects again that could actually be a golden era for Humanity beautiful buildings people staying home raising families there's there's a maybe more emphasis on local farming right healthy farming organic farming better food supply that would be a world that I'd love to live in and it would have almost a complete collapse of white colar jobs but but a a

much better society and so I I think about this from a pretty optimistic point of view and I'm pretty optimistic on on what this could be I'm sure that's not fully what happens but but moving in that direction I think would be something that we should be very excited about but the the disruption that as it happens will be I'm sure pretty pretty messy and scary for many and it's only natural that um our our our Reptilian Brain brings out the fear and the figh ORF flight as soon as you hear that hey every white collar job might be gone and because of AI like obviously that's G to be a natural response but let's just put that aside for a second I think regardless of how the scenarios play out and I love your

optimism I'm fully with you on that let's I'd rather be an optimist and be wrong than be a pessimist and be right if if we all agree AI Innovation is going to cause change regardless of the outcome let's talk about okay that's going to disrupt everything it's not only going to disrupt us as individuals it's going to disrupt businesses and it's going to disrupt markets and what does that why does that place Bitcoin in your view as really the best trade of I'm I'm putting words in your mouth but I'm assuming the best trade of 2025 the best trade right now yeah so if you think about a standard portfolio that doesn't own Bitcoin or crypto you might

think about a 60/40 portfolio 60% index stocks 40% bonds and so 40% of your portfolio is investing is lending money in the middle of a global Fiat debt crisis that to me makes no sense and it hasn't made sense before AI and this kind of gets back to my background is actually fixed income I I used to manage about $70 billion at calipers which is the largest public pension in America and I started my career literally right after the great financial crisis right right when right when Bitcoin started and the pension funded rates Across America plummeted where the the funded rates how much money they have versus how much they owe

in California went to like 80% I think right now it's in in the 70% time but they didn't have enough money to pay their liabilities and yet 40% of their money is sitting in debt in the middle of a debt crisis with yields in the neighborhood of 4ish percent and then overall they have to earn 7% and just like it's a massive mind problem problem right and and I think that that problem does not go away I don't see I'm I'm I'm super bullish on on Doge being able to do some inefficiencies but I'm actually more bullish on that unleashing like removing some of the bureaucracy that holds back productivity then I am on it actually solving the debt crisis

in and of itself so I think it's a great project but I don't see any nation in this world adequately addressing the debt crisis that we have and I don't think that that's really an electable thing so if it's not the debt crisis continues in a in a debt crisis continuing it's not the best idea in the world to be the person that's lending the money and and so I don't think that makes sense for 40% of people's portfolios uh I I think that this part part of this and we were talking about this before the Pod is that there's an educational component to this that people that are educated in Bitcoin they're not going to be able to save in Bitcoin but for a Crypton native audience that has deep conviction I have deep conviction I actually

feel when I've when I've had less Bitcoin for whatever trading or whatever I feel uncomfortable I actually don't sleep well when I don't have Bitcoin when I have Bitcoin and it's crashing I sleep good I sleep like I sleep like a baby and and this kind of gets into like you know everyone's mind's different but but if I'm in if I'm in dollars I'm not sleeping like oh my gosh like why like I I hope Bitcoin doesn't just rip why I'm sleeping or or if for me if I'm out the wrist spectrum and and in an nft or mcoin or something like that like I also don't sleep as well when I'm in Bitcoin I I sleep great and and to me that kind of gets to my conviction of Bitcoin being a true savings asset when it comes to equities this is where AI really

plays in that there's going to be a massive massive disruption and we're sitting here and say okay put 60% of your portfolio in S&P 500 fund where a lot of these companies are going to be disrupted to such a large degree I don't even know what they're going to be worth and and they might be worth a a fraction of the value that they're currently worth and maybe that plays out in dollars maybe doesn't because obviously we have a debt crisis and there's a Fiat Printing and so but but in real terms like what could you buy for one share of of whatever you know S&P 500 I think that's going to go down actually in real terms but Bitcoin I think goes up and and it goes up because it's the only

clear alternative to the global Fiat debt prices it's the only thing that I think that AI will clearly use I think AI will clearly use crypto and and it's it's not going to be I mean I'm I'm pretty bullish on stable coins but with the Fiat Deb CR it's not like that that you want to hold stable coins just park it there right you're still you're still owning a a dollar that's being debased at a very rapid rate and then further out the risk Spectrum I think those are more trades and I think that they're obviously risky trades if you're really into the system I think you could potentially make more than than you can in Bitcoin I think most people that invest in those tend to tend to lose money and and the top think about like a poker game that if it's a poker game

that you know maybe 10% 5% of people are going to be the winners in in in that in that casino and and there are winners I have friends that have made a ton of money trading but but I think that you have to make sure that you're not the not the dumb money at the table but actually the smart money and challenge yourself to say okay what's my advantage versus the other people and and there's a lot of reasons to have an advantage and I think one of the great things about crypto and Bitcoin is that the individual tends to have an advantage over the institution and that's a very reversed thing than than standard markets But ultimately to me the one thing that all this points down out to is is the the larger allocation you can have to bitcoin the more likely you are

to be a long run winner the the one the one question that I know uh everybody would say to that is okay but what if what if I'm let's say all my savings are in Bitcoin and Bitcoin drops 50% and I have a an emergency and I need cash cash okay now I have I have to pull out at a a bad time H how do you do I do you do you not think Bitcoin has a big drop again at some point in the future is that why you're confident in this thesis or maybe explain to us like how how how that scenario would work I think the chances of Bitcoin dropping and sustaining below

65 to 70k are almost zero so that's that's a thesis that I have now obviously there's always the probability of some liquidation event that can send prices for a day or a week who knows how low but as far as like a month plus basis I just don't foresee uh it actually trading back below 65 to 70k and and so to me you you always have to look at your short-term needs and and I would say if you have needs in the next six to 12 months that you're that's not a savings account that's a checking account and and so I'm not telling people to put their checking account into bit right you need to be able to cover your your liabilities and I think that liability even includes you know

whatever some sort of a of a of a crisis that may not be very probable but it's possible like let's say you you have a a deductible on your medical insurance that's whatever 10 15K for the year okay like that maybe that goes in in a checking account but but beyond that saving saving for the long run in in Bitcoin and being able to feel comfortable that that yes it's volatile but that that volatility is actually a blessing like when that volatility goes away that's when the opportunity to really increase your your net worth and in these assets are going to go down okay let's talk about what happens when the the rest of the world catches up to

this and what I mean when I say that is uh there's still a lot of people who either as you said aren't educated about big coin and crypto yet uh or are skeptical or because of Regulation if you're talking about corporations or institutions aren't able to access it very easily uh so there's a lot of a lot of roadblocks there a lot of reasons why people aren't in it yet what happens when the all the rest of the world catches up to that to this when and when do you think that that happens yeah good good question you crypto and and bit coin to me are already a fairly Global asset now there's obviously different

nations and that have taken different regulatory approaches to to bitcoin and China continually bans and unbans it and you just never know what's going to happen out of there but ultimately I I do think that what's happening right now is a massive deregulation of Bitcoin and crypto in the United States and so I actually don't necessarily think that the United States has been the the the obvious leader in crypto to date and you see that with all the different entrepreneurs that end up leaving the United States to to launch whatever business idea that they have and so I think there's so there's going to start to be a a pull back to the United States

as as deregulation happens here uh but ultimately you know I think it's it's interesting with with crypto in the sense that we kind of touched on this a little bit that the individual has beat the institution when it came to allocating to bitcoin and crypto I think even when you look at the United States the the states themselves are looking likely to beat the nation in actually developing a strategic Bitcoin stockpile and on the surface maybe that is a little bit murky as to why but if you think about a state and a state being concerned about the nation that protects the state being irresponsible with

regards to their money then the state actually protecting itself against the irresponsible Nation makes a lot of sense and and so that's what we're seeing right now and I think there's over 10 states that are that currently have various uh parts places along the way of getting to owning Bitcoin directly and they're way further along than the United States I think that the United States is drastically short Bitcoin and it would see I'm I'm personally and I'm I'm obviously an American I'm I'm an America first maxi I'm not a dollar Maxi like the dollar is a means to the end for for American to put America first but to put America First

you actually have to be sober about the reality that we face and when you fa when you are sober about that reality and you're and you see the twins behind Bitcoin the United States would be way better off to start buying it in in a drastic way now but think that that conversation I think is anything but but baked at this point but you know I'm I'm trying to help any way I can uh educate and and and and push us towards doing something but you know if if it's not us I I think other other countries will and ultimately I think there's going to be a a race to to acquire Bitcoin and uh it will probably really kick off when one of the you know top three to five

countries by GDP in in the world start public announcing that they're acquiring Bitcoin you mentioned earlier that one of your scenarios for you think of probabilities one of your probabilities right now is that we could see you know maybe 20 to 25% chance that we go back to the 70k level in Bitcoin and obviously you can extrapolate what that would mean for the rest of the crypto Market everything would go down even further by a percentage basis uh what are the other probabilities that you're looking at right now either short term or for the rest of 2025 yeah so so with regards to to bitcoin which you can extrap it out to

the broader crypto markets call it just roughly speaking 25% of a deeper correction in here 50% that we um that we chop around this area plus or minus 20% 15 20% sort of been like the like 90 90 to 108 range basically yeah maybe even slightly broader like you know low low 80s to to 120 like like just kind of in in that just keeps chopping around for the next three four months before um or or you know also about a 25% that we break out to the upside in the next couple months um as far as towards the end of the year I would put a 80 to 90% probability that we're trading

substantially higher than we have right now so very bullish on the markets throughout the course of 2025 um you know we talked about how for for strive we're really only feel comfortable with allocating to bitcoin for our clients as because we're long-term investors right thinking over the course of of 10 years 20 years 30 years but but looking at at some of these Bitcoin dominance measures stuff like that I do think that we're getting closer to the end of of the rise of Bitcoin versus other alts I my my base case would be that there's that that you know you start to see some some bigger alt rallies but there's actually a little bit higher to go for Bitcoin

dominance from from here uh but but throughout 2025 I do think that that it will move out the risk Spectrum into into other cryptos uh cry cryptocurrencies but I'm base case would be that we're we're not in in an ALT season quite yet maybe maybe a local maybe a local alt bottom though with volatility last night yeah I think all of our listeners will be happy to hear you say that because everybody's been screaming when alt season for it feels like forever uh but our memories are so short so as you look forward the one thing that uh I always like to ask uh people like yourself who have experience in trafi and experience

in professional Investing For for years and decades is the impact of seasonality and it feels like every year here is plays out in sort of a similar way where everybody goes away for the summer and the markets dip or not a lot of liquidity do you think that same thing happens again because the one thing that and I know you don't have a crystal ball but the one thing that feels it always feels like when we're when we're here and we're looking forward it always feels like a this is different this year is different right uh and I I always want to kind of REM try to remember is it actually going to be different or is it more likely just to history repeat because as you're saying with allcoin

season if that actually does play out the way we all think it will throughout this year then hey history did repeat itself and it happened again and we were all just a little bit impatient which does tend to happen so curious how do you think about seasonality for throughout the year Well in in traditional markets there's definitely a seasonality in in the summertime and it's it's I don't think it's much more complicated than a lot of people are going on vacations in in in the summertime and and so in in traditional markets that's that's not the the selling season right so like if you think about like a Cadence for for a company you really want to be hitting cells in in you know from you know now to call it uh into May and then really

pick up again come going into into September and so I do think that you tend to have a slower market then but I think if if I was to make the argument for how could this time be different and not prediction but how could it be different it would be that ai ai Innovation really upend kind of traditional cycles and if we're in this cycle of a 10year period where there's 100 Years of innovation then every month matters materially more than it would have mattered historically so that would be an argument broadly for this time being different and it may may or not for seasonality but broadly I do think that that does if you have 100 Years of innovation and 10 years then this time is different in in a in a certain sense

and then and then I think the Trump factor that that Trump doesn't he's always on and and him and Elon and the VES and the RFK like those guys are kind of you know going founder mode on on the US government so there's less likely to be some sleepy period from the United States for for a period of multiple months so I do think that regardless of if you know the markets go up or not during summer that it's probably not going to be a sleepy three three month period of time okay so at before we wrap here Matt so we've got we've got the the AI trade which is difficult to mention to make as

we said at the beginning right there is not a clear AI trade so your belief is that Bitcoin is really the purest AI trade because well all this disruption happens to who we don't know how it affects the markets in these businesses we don't know but we have the conviction that Bitcoin will continue to do well and then also in the face of all these macro stuffs tariff debt all these things also just increase your conviction in Bitcoin but at the same time you're confident to go down the risk curve well I don't want to put words in your mouth but going down the risk curve and entering maybe an allcoin season you see as as a likelihood am I am I summarizing that well any final thoughts to share yeah I I think the question for people to ask themselves is

what type of investor are you what's your time Horizon right is your time Horizon measured in months or is measured in years or decades and to the extent that it's measured in years and decades then I think it's just Bitcoin and and maybe going out the RIS Spectrum thinking about Bitcoin as an asset class and maybe more leverage forms of Bitcoin I think if you're a a Trader and and you're in the crypto markets and trading I do think that that you're likely to have some success uh going out the risk Spectrum but obviously as we know uh it's in in traditional markets there's this concept of of allocation versus selection and and so you know are you in Bitcoin are you in altcoins the selection criteria I think is going to be even

more important than it has been in past uh cycles of what if you're not in Bitcoin what are you in and and making sure that you're in something that actually has some tnds and a narrative behind it um at least for kind of a shorter term trade fantastic Matt thanks so much for joining us today and breaking this all down everybody listening in let us know are you in Bitcoin I know you guys are but just you know throw Bitcoin in the comments let us know and let us know how you feel about Ai and tariffs and if you want us to dive more into these topics as always the show is for you guys we appreciate your time have a wicked awesome day we'll see you guys again tomorrow thanks Matt yeah thank you as always if you liked today's episode please hit subscribe and make

sure you follow us if you don't miss out on the next one there's also a link in the description to our free 5 minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you get access to our portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day